BlackRock Energy and Resources Income (BERI) is in strong shape ahead of next month’s continuation vote after notching up a third consecutive year of outperformance. 

Annual results for the year to 30 November confirm a total 28.8% return for shareholders underpinned by an underlying 23.5% return from the portfolio of mining, traditional oil and gas and clean energy stocks.

Both beat the investment trust’s composite benchmark which returned 17.9%. The three mining, traditional energy and energy transition indices which make up the benchmark rose 19.2%, 0.6% and 33.9% respectively.

Under BlackRock fund managers Mark Hume and Tom Holl, BERI has smashed its reference index over the five years since the trust adopted the three-part strategy. Net asset value with dividends reinvested has delivered a total 144% underlying gain, with shareholders receiving a total of 155% from shares currently trading on a narrow 4% discount. The benchmark has returned just 65.8%.

Winterflood analyst Ashley Thomas pointed to the strength of the strategy: “BERI has outperformed at least two of the three individual sub-sector indices over the past there and five years and no single sub-sector has outperformed over a combined one, three and five-year period.”

Under the new dividend policy announced last summer, in which the company targets the higher of the previous year’s dividend or 4% of net assets, shareholders should see their total dividend rise by 38.3% to 6.6p per share this year. This will be paid in four instalments of 1.65p per share from a mix of income, revenue reserves and other distributable capital reserves. 

At the current 176.5p share price, that offers a 3.7% yield.

Chair Adrian Brown said the boom in data centre infrastructure spending to support the rollout of artificial intelligence had “brought the supply of power and of critical raw materials and rare earth materials into sharp focus”, and in a reversal of previous years “many clean power companies performed strongly following US energy policy clarification“ with the passing of President Trump’s One Big Beautiful Bill Act. 

The company’s ability to allocate to energy transition, which rose to 34.9% from 29.2% of the portfolio, alongside mining and traditional energy companies had enabled BERI to benefit from this trend. Mining exposure rose to 41.6% from 40.2% as the 57.9% advance in the price of gold saw gold miners surge particularly strongly. Traditional energy stocks were reduced to 23.5% from 30.6% as a glut in supply weighed on the oil price despite rising geopolitical tensions.

The biggest single stock contributor to performance was Abaxx Technologies, a Canadian mining group that diversified into software and infrastructure for energy transition commodities. Its shares benefited from the growth of its Exchange and Clearing platforms, soaring 244% in the past year. From a 1.5% weighting in November 2024, it shot up to be BERI’s biggest investment accounting for 7.5% of assets at the financial year-end. 

Looking ahead to the outlook, the managers said: “We expect power demand to be met via multiple energy solutions, however renewables plus battery storage look to be a key part of the solution to meeting the near-term power needs and are also recovering from previously depressed valuation levels.”